The Ultimate in Reconstruction 'Apgujeong District'... Public Contribution Coordination as a Variable [2022 Real Estate One Pick]

<3> Reconstruction - Apgujeong Apartment District

24 Complexes, Over 10,000 Households
Charming Traditional Wealthy Neighborhood by the Han River
Reconstruction Also Affects Seoul Housing Supply
Obstacles Like Jechohwan Remain

[Asia Economy Reporter Kim Hyemin] The redevelopment in the Gangnam area, which had been stifled by artificial regulations from the government and Seoul city, is beginning to stir in the new year. Major redevelopment complexes are accelerating in unison as they join Seoul city's Rapid Integrated Planning (SinTong Planning). So far, a total of 18 redevelopment complexes have been confirmed to participate in SinTong Planning, with 8 new participants added this year alone.

The most notable area is undoubtedly the Apgujeong district in Apgujeong-dong, Gangnam-gu. This district, consisting of 24 complexes and 10,466 households, is a traditional affluent neighborhood and is located along the Han River, earning it the nicknames "the ultimate redevelopment" and "the biggest redevelopment prize" without exception.

In terms of supply, the redevelopment of the Apgujeong apartment district is also a focal point. Given Seoul's shortage of new housing sites, supplying new units through maintenance projects is the best option, and the Apgujeong apartment district currently exceeds 10,000 households in scale. Seoul city expects that redevelopment through SinTong Planning will increase supply by an average of 1.6 times compared to the existing number of households.

These apartments are aged, ranging from 35 to as much as 46 years old, but redevelopment projects have only recently progressed. In 2009, then Seoul Mayor Oh Se-hoon designated this area as part of the "Han River Renaissance" initiative, but progress was slow. Later, in 2016, the 24 complexes were grouped into six special planning zones for redevelopment under a district unit plan, but the review was postponed, and the project has remained stalled to this day.

However, as part of the government's real estate stabilization policy, a bill was announced in 2020 requiring redevelopment association members to reside for two years before receiving sale rights, which ironically accelerated the establishment of associations. Furthermore, with the launch of Seoul city's SinTong Planning this year, areas such as Districts 2, 3, and 5 plan to begin full-scale initial redevelopment work, including preparing maintenance plans.

Nonetheless, a challenge lies in how much public interest will be reflected in the maintenance plans, especially how public contributions will be coordinated between Seoul city and the associations. SinTong Planning involves Seoul city and the associations jointly creating maintenance plans, facilitating rapid redevelopment while also discussing ways to enhance public interest. As floor area ratios increase, the proportion of rental housing and land donations may also rise, potentially causing conflicts during coordination. When the Han River Renaissance policy was pursued in the past, conflicts arose because raising building heights to 50 floors required land donations amounting to 25% of the project site. How these issues are ultimately resolved could impact future redevelopment projects along the Han River and those under SinTong Planning.

There are other obstacles as well. These include the Redevelopment Excess Profit Recovery System and the Sale Price Ceiling System, which are beyond Seoul city's authority. Seoul city, as the permitting authority, is burdened by concerns that redevelopment in the Apgujeong district could become a new trigger for housing price instability, which has only recently stabilized. An industry insider said, "It is a difficult task to stabilize the market as much as possible while also accelerating redevelopment."

This content was produced with the assistance of AI translation services.